HELOC vs Home Equity Loan Calculator

Compare HELOC (variable, draw period) vs Home Equity Loan (fixed) side by side.
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HEL Monthly Payment

$402.80

HELOC Draw Payment

$354.17

Side-by-Side Comparison

Home Equity Loan Payment$402.80/mo
HEL Total Interest$46,671.18
HELOC Draw Phase$354.17/mo (interest only)
HELOC Repay Phase$433.91/mo
HELOC Total Interest$96,638.79
Better ValueHome Equity Loan

Use the HELOC vs Home Equity Loan Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

This calculator helps homeowners compare the costs and benefits of a Home Equity Line of Credit (HELOC) versus a traditional home equity loan based on their specific financial situation. With average home equity reaching $299,000 in 2026 and interest rates stabilizing around 7-8%, choosing the right equity product can save thousands in interest costs over the loan term.

The calculator analyzes total interest costs by comparing the variable-rate structure of a HELOC (typically prime rate plus margin) against the fixed-rate structure of a home equity loan. It factors in draw periods, repayment phases, closing costs, and different usage patterns to determine which option provides lower total borrowing costs based on your projected needs.

Remember that HELOC rates can fluctuate significantly during the draw period, potentially making budgeting difficult compared to fixed home equity loans. Many borrowers underestimate how much equity they'll actually use, and choosing a HELOC for a one-time expense often results in higher costs than a traditional loan. Always consider the full 20-30 year term, not just initial payments.

Comparing $75,000 Home Equity Options: HELOC vs Fixed Loan

  1. 1 Sarah needs $75,000 for home renovations and has $150,000 in available equity. She's comparing a HELOC at Prime + 1% (currently 8.5%) with a 10-year draw period, versus a 15-year fixed home equity loan at 8.25%.
  2. 2 For the HELOC: $75,000 × 8.5% = $6,375 annual interest during draw period (interest-only payments of $531/month). For the home equity loan: $75,000 at 8.25% for 15 years = monthly payment of $736 including principal and interest.
  3. 3 After the 10-year draw period, the HELOC enters repayment phase with an estimated rate of 9.0%, creating payments of $950/month for the remaining 15 years. Total HELOC interest over 25 years: approximately $89,250.
  4. 4 The fixed home equity loan results in total interest of $57,480 over 15 years, saving Sarah $31,770 compared to the HELOC option. The home equity loan is more cost-effective for her one-time renovation project, despite slightly higher closing costs of $1,200 versus $800 for the HELOC.

Source: CFPB — Owning a Home · Last updated: April 2026

Frequently Asked Questions

What is the difference between a HELOC and a home equity loan?
A home equity loan gives you a lump sum at a fixed rate with fixed monthly payments. A HELOC provides a revolving credit line with a variable rate, where you draw and repay during the draw period (usually 10 years), then repay the balance over 10-20 years.
Is a HELOC or home equity loan better for home improvements?
A HELOC is often better for ongoing projects where costs come in phases, since you only pay interest on what you draw. A home equity loan is better for a single large expense like a kitchen remodel with a known total cost, since the rate is fixed.
Can I deduct interest on a HELOC or home equity loan?
Yes, if the funds are used to buy, build, or substantially improve the home securing the loan. The interest is deductible on combined mortgage debt up to $750,000 ($375,000 if married filing separately). Interest on funds used for other purposes is not deductible.

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